The London Lite owner, Associated Newspapers, has financially backed the decision of the Evening Standard to go free.

The Standard editor, Geordie Greig, said the Standard board made its decision on its own but informed Associated, which remains a minority shareholder after selling 75.1% of the Standard to a consortium led by Russian businessman Alexander Lebedev in February.

"They have been very supportive of the Standard but they are not on the board and have no decision-making role," Greig said.

Playing down reports of a rift between the Standard and Associated, which owns freesheet London Lite, which could suffer under the move, Greig said Associated was backing the decision to drop the Standard's 50p cover price from Monday.

"They are backing it and there's more money coming in and they are part of it."

One informed estimate says the Standard will lose £250,000 circulation revenue a week from the new strategy (not all of the 50p cover price goes back to the paper). The paper will, however, save money on distribution.

Journalists feel redundancies are inevitable to replace that lost revenue, but Greig denied this.

"There's no impact of going free on journalistic staff," Greig said.

But management are looking for savings everywhere and executives are conducting a root-and-branch review to identify ways to save money.

Despite Lebedev deciding to pump £30m into the paper over three years, the Standard still loses money. In the last year that Associated wholly owned it, the paper made a loss of £20m. Now executives privately believe their turnaround plan can drive the paper into profit in four years.

Lite has picked up some advertising since the London paper folded, but is still a long way from being profitable. It has responded cautiously to the Standard announcement.

"It is early days since the closure of the London Paper and the launch of this new initiative from the Evening Standard. We will continue to assess the situation regarding London Lite," said Steve Auckland, the managing director of Associated Newspapers' free newspaper division. "It is business as usual and we are pleased with the progress we are making."

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